Worker productivity drops for second consecutive quarter
The productivity of U.S. workers in April through June dropped for the second consecutive quarter, pushing labor costs up from 2010’s record low, Bloomberg reported.
The measure of employee output per hour decreased at a 0.3 percent annual rate in the second quarter after a 0.6 percent drop in the first quarter, according to figures released by the U.S. Department of Labor. Expenses per employee climbed at a 2.2 percent rate.
Falling efficiency and rising costs hurt profits and mean companies have less incentive to take on staff or increase pay, representing another obstacle to the recovery after growth almost stalled in the first half of the year.
“The near-term outlook for productivity is not a happy one,” said Nigel Gault, chief U.S. economist at IHS Global Insight Inc., in an interview with Bloomberg. “We expect its growth to remain sluggish over the next several quarters.”
Today’s numbers are a contrast from a year ago. For the second quarter of 2010, productivity climbed 0.8 percent compared with a 1.2 percent year-over-year increase in the first quarter. Labor costs fell 2 percent in 2010, the largest decline since records began in 1948.